André Stoorvogel, Head of Marketing, Rambus Bell ID
Money 20/20 is over for another year. And as sore feet (and heads) recover and the dust starts to settle, attention is turning to the big trends and key themes.
The show has always been focused on the future and this year’s installment was no different.
In particular, there was much to make retailers sit up and take notice, for it is readily apparent that payments are in the midst of unprecedented transformation.
So, what forces are driving the change and what does the future of retail look like?
In-store on the way out?
Brick-and-mortar stores are under threat from all angles.
From a payments perspective, the in-store checkout experience is increasingly incompatible with modern lifestyles and expectations. For example, 86% of consumers avoid stores with long queues, and frustration with waiting in line costs retailers billions in revenues each year. Too many retailers invest huge sums into the look and feel of stores, but neglect the pragmatic elements that can streamline the consumer experience.
In addition, many have been slow to adapt to consumer behavior and demand. Here’s an example. We are living in a digital era, yet half of UK small businesses only accept cash, even though the UK has one of the most advanced contactless infrastructures in the world, over 50% of UK adults carry less than £5 in cash and 54% of Europeans paid using a mobile device in 2016. It is this inherent conservatism and disconnect that is driving consumers away from the high street.
It is not only the in-store payments experience, however, that poses challenges to retailers.
Despite the fact that consumers use their mobile devices more than their PC’s, desktops account for 85% of online spending. In addition, 23% of users abandon mobile applications after only one use, and a staggering 86% have abandoned a mobile basket due to the frustration of a lengthy checkout experience. Even more concerning is that only 4% of small retailers even offer a mobile application that accepts payments.
It is clear, therefore, that retailers must rethink their approach to fully seize the m-commerce opportunity.
Despite the differences between in-store and in-app payments, the steps to improve them are the same. One is to remove as much friction as possible from the payments process to eliminate consumer frustration and prevent abandonment. Another is to enhance the ‘buying experience’ to make payments more than just, well, paying.
The road to invisible payments
The ‘contactless payments revolution’ has undoubtedly gone a long way to reducing friction across the payments ecosystem and shortening queues at the checkout. An advancing contactless infrastructure, an increase in near field communication (NFC)-enabled mobile devices and the launch of big name platforms has triggered explosive growth across the mobile payments industry.
And this is only the start. The wider integration of payments functionality into wearable technology is set to further streamline the checkout process, as the consumer does not have to rummage through their pocket in search of their device. This, coupled with innovations such as beacon technology (which underpins platforms such as Google’s Hands Free app), means that paying will soon require only the most limited consumer interaction.
In parallel, the introduction of ‘Buy with’ functionality within mobile applications by the OEM Pay platforms has simplified in-app purchases. Money 20/20 also saw some key announcements that will further streamline the in-app experience. EMVCo announced that its EMV 3DS 2.0 specification implements intelligent risk-based decisioning to encourage frictionless consumer authentication. The FIDO Alliance also confirmed it is working with EMVCo to enable consumers to conveniently use on-device authenticators, such as a fingerprint or “selfie” biometrics, to securely verify their presence when making an in-app payment.
With the infrastructure in place, retailers must be proactive and embrace these technologies to streamline the consumer experience and reduce checkout abandonment both in-store and in-app.
Making payments pay off
Simplicity of use, however, is only half the battle. Enhancing the buying experience is not new age marketing jargon (seriously), but rather a concrete means of integrating value-added services into the payments process to drive adoption.
The OEM Pay platforms and banks are leading the charge in delivering an added-value ‘buying experience’. For example, Android Pay automatically deploys loyalty points and applies offers, and initiatives such as ‘Android Pay Day’ offer monthly incentives. From the bank world, Royal Bank of Canada has integrated over 150 loyalty programs into its HCE wallet.
In addition, Samsung Pay used Money 20/20 as a platform to launch its ‘Payments+’ strategy. The platform now works with over 4 million loyalty and reward cards. Not only this, but the utilization of geolocation data delivers a personalized experience that enables users to redeem discounts at nearby restaurants and stores.
The future of retail payments
So, how are retail payments changing? A key takeaway from Money 20/20 is that we can expect the concepts of in-store and in-app payments to become increasingly blurred.
For example, in-aisle payments enable retailers to combine the in-store experience with in-app convenience. Rather than queuing at the checkout, the consumer can simply scan the physical product within their mobile application, perform an in-app purchase and display their digital receipt upon leaving the store.
Predictive analytics and machine-learning are another avenue by which retailers can improve the consumer experience, with mobile applications leveraging past behavior to deliver smart recommendations.
In addition, augmented reality enables consumers to analyse product information and read reviews in-store and in real time, rather than having to research at home before heading out to the store.
The end of payments as we know it…and we feel fine
Whatever avenue mobile payments takes us down, it is clear that payments are undergoing an unprecedented period of transformation. Retailers, much like banks, are often accused of being conservative and resistant to change. But they now face a clear choice. Adapt or fall behind.
Money 20/20 showcased a future in which payments are no longer a chore, but rather a rewarding experience. By moving quickly, embracing change and future-proofing their offering both in-app and in-store, retailers can find their place in this brave new world.
Aston Martin says back on the road to profitability after 2020 loss
By Costas Pitas
LONDON (Reuters) – Aston Martin expects to almost double sales and move back towards profitability this year after sinking deeper into the red in 2020, when the luxury carmaker was hit by the pandemic, changed its boss and was forced to raise cash.
The British company’s shares jumped 9% in early Thursday trading after it kept a forecast for around 6,000 sales to dealers this year as new management turns around its performance.
The carmaker of choice for fictional secret agent James Bond has had a tough time since floating in 2018, as it failed to meet expectations and burnt through cash, prompting it to seek fresh investment from billionaire Executive Chairman Lawrence Stroll.
The firm made a 466-million pound ($660 million) loss last year, compared with a 120 million pound loss in 2019, as sales to dealers fell by 42% to 3,394 vehicles, hit by the closure of showrooms and factories due to COVID-19.
For 2021, it expects “to see the first steps towards improved profitability” but is still likely to post a pre-tax loss, the carmaker said.
“I am extremely pleased with the progress to date despite operating in these most challenging of times,” Stroll said.
Aston said demand for its first sport utility vehicle, the DBX, which rolled off the production line at its Welsh plant in 2020, was strong in a lucrative segment of the market it entered to widen its appeal.
The model accounted for 1,516 of deliveries to dealers last year and the company expects further growth in its first full-year of sales, including in the key market of China, where rivals such as Bentley are also seeing high demand.
“We had not even a half-year DBX production in wholesome so probably we are going to see over-proportional growth in China,” Chief Executive Tobias Moers, who took over in August, told Reuters.
($1 = 0.7065 pounds)
(Reporting by Costas Pitas. Editing by Estelle Shirbon and Mark Potter)
Oil prices hit 11-month highs on tighter supplies, Fed assurance on low rates
By Florence Tan
SINGAPORE (Reuters) – Oil prices rose for a fourth straight session on Thursday to the highest levels in more than 11 months, underpinned by monetary easing policies and lower crude production in the United States.
Brent crude futures for April gained 19 cents, 0.3%, to $67.23 a barrel by 0400 GMT, while U.S. West Texas Intermediate crude for April was at $63.30 a barrel, up 8 cents, 0.1%.
Both contracts touched their highest since January earlier in the session with Brent at $67.44 and WTI at $63.67.
An assurance from the U.S. Federal Reserve that interest rates would stay low for a while boosted investors’ risk appetite and global financial markets.
“Comments from Fed Chairman, Jerome Powell, earlier in the week relating to the need for monetary policy to remain accommodative have probably helped, but sentiment in the oil market has also become more bullish, with expectations for a tightening oil balance,” ING analysts said in a note.
A rare winter storm in Texas has caused U.S. crude production to drop by more than 10%, or 1 million barrels per day (bpd) last week, the Energy Information Administration said. [EIA/S]
Fuel supplies in the world’s largest oil consumer could also tighten as its refinery crude inputs had dropped to the lowest since September 2008.
The Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, is due to meet on March 4.
The group will discuss a modest easing of oil supply curbs from April given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.
Extra voluntary cuts by Saudi Arabia in February and March have tightened global supplies and supported prices.
(Reporting by Florence Tan)
Australian media reforms pass parliament after last-ditch changes
By Colin Packham and Swati Pandey
CANBERRA (Reuters) – The Australian parliament on Thursday passed a new law designed to force Alphabet Inc’s Google and Facebook Inc to pay media companies for content used on their platforms in reforms that could be replicated in other countries.
Australia will be the first country where a government arbitrator will decide the price to be paid by the tech giants if commercial negotiations with local news outlets fail.
The legislation was watered down, however, at the last minute after a standoff between the government and Facebook culminated in the social media company blocking all news for Australian users.
Subsequent amendments to the bill included giving the government the discretion to release Facebook or Google from the arbitration process if they prove they have made a “significant contribution” to the Australian news industry.
Some lawmakers and publishers have warned that could unfairly leave smaller media companies out in the cold, but both the government and Facebook have claimed the revised legislation as a win.
“The code will ensure that news media businesses are fairly remunerated for the content they generate, helping to sustain public-interest journalism in Australia,” Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said in a joint statement on Thursday.
The progress of the legislation has been closely watched around the world as countries including Canada and Britain consider similar steps to rein in the dominant tech platforms.
The revised code, which also includes a longer period for the tech companies to strike deals with media companies before the state intervenes, will be reviewed within one year of its commencement, the statement said. It did not provide a start date.
The legislation does not specifically name Facebook or Google. Frydenberg said earlier this week he will wait for the tech giants to strike commercial deals with media companies before deciding whether to compel both to do so under the new law.
Google has struck a series of deals with publishers, including a global content arrangement with News Corp, after earlier threatening to withdraw its search engine from Australia over the laws.
Several media companies, including Seven West Media, Nine Entertainment and the Australian Broadcasting Corp have said they are in talks with Facebook.
Representatives for both Google and Facebook did not immediately respond to requests from Reuters for comment on Thursday.
(Reporting by Colin Packham in Canberra and Swati Pandey in Sydney; Writing by Jonathan Barrett; Editing by Leslie Adler, Stephen Coates and Jane Wardell)
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